Anthony DiGiorgio, DO, MHA, an Assistant Professor at the University of California, has criticized the 340B Drug Pricing Program. He said that while the program benefits institutions, it does not ensure that funds are directed towards patient care. DiGiorgio described it as a flawed policy rooted in earlier Medicaid drug pricing changes. His comments were made on X.
“340B is a subsidy aimed at institutions, not patients. It gives them a massive revenue stream without any stipulation the dollars go to patient care,” said DiGiorgio. “It was implemented after the MDRP best price provision vaporized manufacturers discounts to safety net hospitals. Bad policy begets bad policy.”
The 340B Drug Pricing Program was established in 1992 with the aim of requiring drug manufacturers to provide outpatient medications at discounted prices to eligible healthcare providers serving vulnerable populations. The program is administered by the Health Resources and Services Administration and seeks to help covered entities stretch federal resources to enhance patient care and services.
A report by the National Alliance of Healthcare Purchaser Coalitions for 2024 found that prices at large 340B hospitals averaged 35% higher for common outpatient services compared to non-340B hospitals. This price disparity was estimated to add $36 billion annually in healthcare costs for employers, based on an analysis of commercial claims data for over 25 million Americans.
According to a report from PhRMA, California’s 340B program has experienced significant growth. Hospitals in the state have maintained numerous partnerships with pharmacies. As of 2025, there are over 3,500 contracts between 340B hospitals and pharmacies in California, with approximately 40% involving out-of-state pharmacies. This trend has sparked discussions about whether the program aligns with its original intent.
DiGiorgio is a neurosurgeon and health policy advocate based in California. He serves as an assistant professor at the University of California, San Francisco, and as an attending neurosurgeon at Zuckerberg San Francisco General Hospital. His work focuses on healthcare economics, pricing transparency, and reform of federal health programs.
